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SAG-AFTRA: Anti-Merger Lawsuit Drops a Key Demand

The plaintiffs drop a demand for access to member emails and a claim that union merger entails an improper election, while adding a fiduciary duty claim and demand for attorneys fees. Meanwhile, 131,000 ballots hit the post office today.

Anti-merger activists filed an amended complaint today, unexpectedly backtracking on a claim that the SAG/AFTRA merger referendum amounted to an improper election by extending the terms of existing board members, and also dropping their demand that SAG provide them access to and use of member email addresses.

That latter is a strategic setback, because it removes a demand that anti-merger forces be granted a low-cost or no-cost method of communicating with the membership, other than the opposition statement included in the referendum packet.

SAG sources confirmed that those packets are being mailed today to approximately 131,000 members of SAG and AFTRA. The packets include pro and con statements, merger ballots, the merger agreement, proposed SAG-AFTRA constitution and a pension and health feasibility review. Ballots are due back March 30.

The suit does not seek to stop the mailing, but does demand that the union not “call for a vote” on the proposal until it performs an actuarial study of the impact of pension and health plan merger.

Additional papers filed today spell out the terms of the preliminary injunction the plaintiffs seek and will argue for at a March 26 hearing: an order that SAG and its officers be “enjoined and prohibited from tallying the merger vote, or publicly announcing the results” until the guild’s executive committee “has recommended . . . an independent study detailing the actuarial effect of any proposed merger of the pension and/or health plans.”

The requested injunction would also mandate “a truthful and complete disclosure . . . (of the merger plan’s) limitations and omissions, including any potential adverse impacts.”

As expected, the amended complaint also seeks to add a claim against SAG’s officers asserting that they’ve violated their fiduciary duty to the union. The plaintiffs need court approval to add this claim, so they filed a brief allowing with the amended complaint.

Approval is not unusual, but would only mean that the court will then review whether a claim might be legally and factually supportable, and not necessarily that the court agrees with the claim. In most areas of litigation, plaintiffs can file whatever claims they think appropriate, but sometimes – as is the case here – statutes require them to seek court permission even to assert the claim.

The new claim brings with it a demand for attorneys fees, and also interposes a demand in the name of SAG itself that the officers pay damages to the union. In other words, the plaintiffs suing SAG and the officers are also purporting to make a claim on behalf of one defendant (SAG) against the other defendants (the officers).

Meanwhile, SAG is expected to file a motion later today seeking to dismiss the entire lawsuit. The motion will be heard at the same March 26 motion as the plaintiff’s demands.

As to why the plaintiffs dropped the claim of improper election, SAG general counsel Duncan Crabtree-Ireland pointed out to The Hollywood Reporter last week that unions merge all the time, and said that “federal Department of Labor regulations allow merging unions to establish interim officers and boards appointed as part of the merger.” Court cases have upheld those regulations, THR is told.

It’s somewhat unusual for a plaintiff to delete a claim in this fashion just days after an initial filing, without the court having even held a hearing.

As in the initial complaint filed last week, defendants in the suit are SAG, guild president Ken Howard, secretary-treasurer Amy Aquino and vice-presidents Ned Vaughn, Mike Hodge and David Hartley-Margolin. In addition, national executive director David White is listed in the caption (i.e., title) of the case, but omitted from the list of defendants in the body of the document.